Here’s a short paper from the latest McKinsey Quarterly on how businesses can use social networks effectively to promote their products and services (direct download here). Bottom line, treat social networks as enablers and amplifiers of word of mouth, which can only be truly ignited by delivering real and authentic value to users.

Sure, the paper is a little ‘motherhood and apple pie,’ and only tangentially touches on social commerce (the potential of paid for virtual goods to activate word of mouth), but it’s a good reminder that social networks are above all word of mouth media.

Speed summary: Unlocking the Elusive Potential of Social Networks

Few brands have unlocked the potential of social networks to enable and amplify word of mouth – brands should treat word of mouth generated on social networks as a distinct form of media. By doing so, word of mouth ceases to become mysterious and unmeasurable, but a form of content to which businesses can apply tried-and-true content-management practices and metrics.

Unlike traditional advertising content, which can be purchased, word of mouth generated by social networks is a form of marketing that must be earned, by offering genuine utility to individuals who initiate or sustain virtual world-of-mouth conversations.

One way to ignite word of mouth in social networks is to offer social utility (as opposed to practical utility) by confering social importance on word of mouth hubs – through achievement “badges” can be posted to profile pages, deploying leader boards or offering achievement scores.

A second way to activate and amplify word of mouth is to offer social network users the opportunity to share virtual goods – the $5bn industry of nonphysical objects used in online communities and games – which become a talking point in their own right, and oil the wheels of social discourse. Again, virtual goods offer social utility – a form of self-expression, that reinforces the sense of self-importance and self-worth. Brands should actively experiment with ways to use virtual goods as catalysts of word-of-mouth media – such as enabling virtual gifting of digital consumer collectibles.

Thirdly, the basic laws of consumer behavior, and consumer word of mouth still apply: consumers love a bargain, and love to talk about them, so brands should take full advantage of social networks as powerful notification tools. However, it is important to deploy feeds and alerts as word of mouth catalysts – rather than than broadcast social media junk mail. They should be deigned to create conversations.

Fourthly, and finally – brands should avoid using gimmicks – no dancing monkeys, artificial contests, or “stupid tricks”; they add no value and waste people’s time. Word of mouth is powerful because it is useful (vicarious/social learning – word of mouth helps us learn from each other) and authentic. If brands loose authenticity, they lose the power of word of mouth.

Chartered psychologist specialising in consumer behaviour, wellbeing and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.